Globalization Comparative Essay – Pros and Cons

Globalisation From the 20th century to today, with travel communication and transport possibilities, grows the ratio of companies and countries providing wide eggshell of investments and business activities internation distributively(prenominal)y. Moreover, the number of people migrating across the musket b alone is signifi sewertly increasing. In sepa outrank words, the world as we know it today, is different than the world of yesterday. Thus, it is ever-changing into wizard huge, global, village. The term globalization interprets worldwide integration and maturation. (Dictionary. om 2012) ilk ein truth change, especially those of such a macroscopical volume, also the model of globalised and compound world is dividing society, not only academic, into two different argumentative positions. marriage offer and opposition. Many people believe that the globalization causes more negatives than positives on the economies of countries in the world. This essay discusses conglo merate impacts of globalisation on economies considered from two common points of view. Primary atomic number 18 comp ard positives and negatives caused by integration of countries worldwide.Subsequently, it is necessary to real numberize the sizeableness of the one-third world in the turn of globalisation, thusly this essay also investigates the case of evolution countries and dissimilar benefits for them as well as the crucial reparation caused by liberalisation of their scotch environment and enthral of powerful multi-national corporations into local anaesthetic markets. One of the basic characteristics of an integrated world is that countries ar more likely to champion each other in the case of scotch problems, because they are interdependent.Companies invest outside(a)isticly, governments cooperate and sign isobilateral or multilateral international agreements and establish unions (Common riches, NAFTA, EU,) to change backup and flow of jacket crown. Moreo ver, bank sector operates with the assets all around the world. All these criterions be unyielding to the category of international trade. With the formation of world market and multinational investments is materially connected the sharing of interests spread worldwide.Therefore, international trade is defecaten to be an indicator of interdependence, its high and with whatsoever interruptions rapidly growing values are legitimate as evidence of the increasing interdependence of nations. (IMF 2001) If conditions in countries are sound and economic environment healthy, businesses are making profit, export goods and pay income tax and CLO fees. On the other hand, if one country has various fiscal or debt problems, economic performance of particular section is weak. Businesses are making loss or are less likely to enter the market and international trade decreases.This position motivates states to protect each other from the go bad and keep economic environment healthy. For e xample in European Union is established European Financial Stabilisation Mechanism for the purposes of protecting states from the bankrupt and keeping economic performance satisfactory. This mechanism provides monetary assistance to EU Member States in monetary difficulties. (European Commission 2012) Globalisation leads to increase in rich-poor gap. In terms of rich-poor gap is meant the difference in wealth between rich north and poor randomness, in other words, genuine and underdeveloped countries.Only stiff companies can provide financially demanding investments across the borders. Considering fact that firms are profit-maximisers, substantive reason for place of bang-up and resources in developing countries is expense reduction therefore they are enlarging profit. Costs of labour and point of intersectionion intakes, as well as taxes, are not inconsiderably trim back than in developed countries. However, all the profit make in developing world flows back to the dev eloped world. According to United Nations collection on concern and Development, in year 2007 was net inflow of chief city into developing countries 196. bill. USD and general export of capital was 772 bills. USD. (UNCTAD 2007) Moreover, companies investing abroad are so rich and powerful, that they can rule the market in smaller countries and take a competitive advantage. In developing countries are various problems to be solved by the businesses, solution with poor infrastructure or lack of subject workforce, ending with weak financial performance of local businesses to overcome these issues. On the other hand, multi-national companies rich person often more resources available to enter the market and their strong background provides them a competitive advantage. While local firms often find it difficult to compete with these firms, MNCs be to be doing truly well in contuse of the competitive challenges faced. (Ogutu and Samuel 2011, p. 1) Globalisation contributes to the melioration of the economies in developing countries. Firms enter the undeveloped market and invest their capital. Afterwards, these companies start-off to produce goods, employ people and sell their products and services. Furthermore, expands trade and export of various supplies and materials in and from a specialised country.Market in particular regions evolves and becomes liberalised as an impact of product exchange and international investments. liberalisation leads to further development of a countrys financial system which in originate is thought to enhance productivity in the real scrimping (Arestis and Singh 2010, pp. 11-12) In addition, the national budgets of countries benefit in the main from CLO-fees, income tax and GST set on all change goods and services. Furthermore, citizens can take an advantage of working opportunities, including in the flesh(predicate) returns and further qualification, provided by international companies and, of course, their income increases.Living standard of the population rises. As the evidence of such globalisation impact is considered the increase in GDP and improvement of economies in developing countries. For instance globalisation in India had a favorable impact on the overall growth rate of the frugalitygrowth rate in the 1970s was very low at 3% above 8% was an achievement by the Indian saving during the year 2003-04. (Goyal 2006, p 168) Contrasty, in the long run vantage point, globalisation causes various damaging negatives to each parsimony, mostly of smaller, not very powerful (developing and less developed) countries.The circle of naturally changing periods of productivity and recession in parsimony is considered to be an economic law. During the recession, which is regularly repeating status of each market economy in the world, the liberalised markets of particular countries, depending on multi-national corporations (foreign bank sector, several(prenominal) industrial sectors), are very threatened. Once recession begins, firms are reducing their production, termination factories and releasing employees. As a consequence is viable to observe glint in productivity, decrease of economic performance and increasing unemployment.Arestis and Singh assume, that the financial crisis (the period of recession) of terrible 2007 and the subsequent spread of it in the rest of the economy and the world, does not augur well at all for the poor, especially so in the developing world. (Arestis and Singh 2010, p 7) If economies depend on those corporations and world market in general, they could find themselves in a disastrous situation. reach of the crisis can be realized by dramatically reduced capital inflow and a large private impertinent refinancingthat all reflects on the reduction of export performance and a drastic stock in export markets. (Djordjevic and Stoiljkovic 2009 p 264) For completion of the invoice of India it is important to adjust situation of Indian econ omy after year 2006. Due to globalization, the Indian economy cannot be insulated from the present financial crisis in the developed economies. (Prasad and Reddy 2009) Furthermore, according to Prasads and Reddys research, the Indian economy was affected in various sectors from increase of unemployment, fall in investments and exports, This whole model of Indian economy describes clearly short- and long-run dos of globalisation process and interdependence of countries in the world.The integration of economies brings definitely benefits in the short run, but has destructive consequences in the long run, spreading the crisis between countries rapidly. Investigating and considering of all proposing and contend arguments relevant for the discussion about globalisation, it is possible to answer that the process of integration and development might have several positive effects on cooperation of the countries and, in addition, short-run positive affect on economies of developing count ries.However, in long-run it is possible to recognize several problems with financial help of the states between each other, found on enormous amounts payable for the countries which have debts. (Greece, Spain, Italy,) As Dixon suggests, the bailout fund doesnt have enough cash to rescue both Madrid and Rome. (Dixon 2012) Moreover, considering the outflow of capital from developing countries and therefore enlarging the rich-poor gap and profits of multi-national companies, improvement in economies of developing countries could appear as irrelevant.Destructing effect on the people living in terce world countries is in long-run very possible. At least the risk of possible damage is so enormous that it is significant that the globalisation causes more combat injury than good on the economies not only of the Third world countries. Reference list Arestis, P & Singh, A 2010, FINANCIAL globalisation AND CRISIS, INSTITUTIONAL TRANSFORMATION AND comeliness, Centre for Business Researc h, University of Cambridge, Working paper no. 405, pp. 11-12. Available from www. cbr. cam. ac. uk 22. 9. 2012Djordjevic, M & Stojilikovic, S 2009, GLOBALIZATION AND THE CHALLENGES OF THE universe of discourse ECONOMIC CRISIS, FACTA UNIVERSITATIS Series Economics and Organisation Vol. 6, zero(prenominal) 3, 2009, p. 264. Available from http//facta. junis. ni. ac. rs 22. 9. 2012 Goyal, K A 2006, touch of Globalization on Developing Countries (With Special Reference To India), transnational Research Journal of Finance and Economics, Issue 5 (2006), p. 168. Available from www. eurojournals. com/finance. htm 22. 9. 2012 http//blogs. reuters. com/hugo-dixon/tag/european-central-bank/ http//ec. europa. eu/economy_finance/eu_borrower/efsm/index_en. tm http//www. imf. org/external/pubs/ft/fandd/2001/06/streeten. htm Ogutu, M & Samuel C n. d. , STRATEGIES ADOPRET BY multinational CORPORATIONS TO COME WITH COMPETITION IN KENYA, University of Nairobi, Nairobi Kenya, p. 1 Available from h ttp//www. aibuma. org/ 22. 9. 2012 Prasad, A & Reddy,P 2009,Global Financial Crisis and Its Impact on India, J Soc Sci 21(1) 1-5 (2009), 2009. Available from http//www. krepublishers. com United Nations Conference on Trade and Development 2008, DEVELOPMENT AND GLOBALISATION Facts and Figures, United Nations Publication, Geneva, p. 16